#United States #Redwood City #AI Technologies #Dell'Oro Group #Data Center Capex

Rapid Growth in Data Center Capital Expenditure

According to the recently released report by Dell'Oro Group, a leading market research firm focused on telecommunications and data center sectors, the global capital expenditure (capex) for data centers is anticipated to experience substantial growth over the next several years. The report forecasts a compound annual growth rate (CAGR) of 21% through the year 2029. Notably, hyperscale cloud service providers are expected to dominate this market, contributing approximately 50% of the estimated $1.2 trillion in data center capex by 2029.

The Driving Forces Behind Growth

Baron Fung, the Senior Research Director at Dell'Oro Group, notes that the rapid uptake of artificial intelligence (AI) technologies is a significant driver of increased expenditure in data center infrastructure. He emphasizes that components such as General Purpose Graphics Processing Units (GPUs) and specialized AI accelerators are now responsible for around one-third of total data center expenditures, positioning them as the largest contributing factors to growth in this sector.

Additionally, investments in supporting infrastructure—spanning racks, general-purpose computing devices, storage solutions, networking components, and physical facilities—will also sustain this growth. Hyperscalers are leading the industry by adopting vertically integrated solutions and tailored architectures that optimize performance while driving down computing costs.

Projected Capacity and Market Trends

In response to the soaring demand for data processing capabilities, both hyperscalers and colocation providers are slated to add over 50 gigawatts of new capacity within the next five years. Although a temporary slowdown is predicted for 2026, long-term investments are anticipated to uphold positive growth trends throughout the forecast period.

The report further reveals that specialized servers accelerated for AI training and other domain-specific tasks may constitute approximately half of the total data center infrastructure spending by 2029. Moreover, the leading four U.S. cloud service providers—Amazon, Google, Meta, and Microsoft—alone are projected to account for almost half of global data center capex by 2025.

Interestingly, the rest of the cloud segment, which includes new-age cloud services and GPU-as-a-Service providers, is expected to display a remarkable CAGR of 39%, indicating a dynamic shift within the industry as new players emerge.

Comprehensive Market Insights

Dell'Oro Group's Data Center IT Capex 5-Year Forecast Report not only provides these optimistic forecasts but also includes valuable historical data dating back to 2014, offering extensive insight into market and technology trends. This in-depth analysis facilitates sound decision-making for stakeholders in the data center landscape.

The report covers various market segments, including the top four U.S. and Chinese cloud providers, Tier 2 cloud services, telecommunications firms, and enterprises, while also detailing the equipment revenues for data center infrastructure, servers, and storage systems.

For interested parties, Dell'Oro Group offers accessible options for purchasing the report with direct contact available for inquiries.

About Dell'Oro Group

Dell'Oro Group operates as a market research enterprise dedicated to providing strategic competitive analysis in the telecommunications, networks, and data center IT sectors. They furnish comprehensive quantitative and qualitative data aimed at assisting vital, fact-based business decisions. Those interested in further insights can reach out to Dell'Oro Group through their official website or contact number.